Key Takeaways
- RLUSD, the dollar-backed stablecoin developed by Ripple Labs – the issuer of the XRP token, has been approved by the New York Department of Financial Services (NYDFS).
- Ripple tested RLUSD’s scalability and cost-effectiveness by minting 13.9 million tokens on the XRP Ledger and Ethereum blockchains. 3.5 million RLUSD was issued on Ripple, costing just 0.00048 XRP in fees, while it cost 0.00161 ETH to mint 10.4 million RLUSD on Ethereum.
- RLUSD is a fully U.S.-regulated stablecoin that meets the standards of the Dodd-Frank Act and Basel III. This makes it a more attractive option for financial institutions than established stablecoins like USDT and USDC, which have faced regulatory scrutiny.
- Market experts and XRP enthusiasts are also expecting the imminent launch of spot Ripple ETFs on Wall Street in the coming weeks. Leading asset managers like Bitwise, 21Shares, Wisdom Tree, and Canary Capital have filed applications with the SEC for an ETF backed by the XRP token.
Blockchain payments firm Ripple Labs has received regulatory approval from the New York Department of Financial Services (NYDFS) to move ahead with the launch of its USD-denominated stablecoin, RLUSD. The company marked the occasion by minting over 13 million RLUSD tokens across the XRP Ledger and Ethereum blockchains, christening a key phase in its mainnet testing.
Ripple Mints 13.9 Million RLUSD On The XRP Ledger And Ethereum Blockchains
According to data compiled by Ripple Stablecoin Tracker, the company minted a total of 13.9 million tokens. 2.6 million RLUSD was issued first, followed by three smaller mints of 100,000, 160,000, and 640,000 RLUSD on the Ripple network. Concurrently, two batches of 10.4 million and 640,000 RLUSD were minted on Ethereum.
It costs just 0.00048 XRP ($0.001) to mint the 3.5 million RLUSD on Ripple while minting the larger batch of 10.4 million RLUSD costs 0.00161 ETH ($6.31) on Ethereum. These tests were necessary to showcase the scalability and cost-effectiveness of both blockchains.
RLUSD, which is fully backed by onshore U.S. assets, has been undergoing rigorous testing through minting, burning, and transferring procedures across the XRP Ledger and Ethereum blockchains. Ripple confirmed that these tests are aimed at ensuring the stablecoin’s functionality before its official release.
With the NYDFS approval, RLUSD will be among the very few stablecoins that will be regulated in the U.S. It will also be entering a highly competitive market where it will face strong contenders like Tether’s USDT and Circle’s USDC.
However, unlike its competitors, Ripple has made sure that RLUSD meets the strict regulatory requirements of the U.S., including the Dodd-Frank Act and Basel III standards, which positions the stablecoin as a reliable asset for financial institutions.
RLUSD is fully collateralized by U.S. Treasuries and held in regulated custody, ensuring its compliance with the Federal Reserve and FDIC guidelines.
USDT has faced scrutiny for inconsistent audits, while USDC partially operates offshore, which makes its compliance with certain U.S. standards complicated. In the case of RLUSD, Ripple touts its transparent operations and real-time auditing capabilities as the standout features that make it attractive to investors and financial entities.
Spot Ripple ETFs May Be Nearing Launch
Market experts are also optimistic about a potential spot XRP exchange-traded fund (ETF) launching soon. Crypto investors are anticipating the Trump administration, which assumes office on January 20, will introduce favorable policies for the sector. This has also fueled hopes among Ripple enthusiasts over a potential settlement in its legal battle with the Securities and Exchange Commission (SEC).
Prominent market figure and former host of the Bitboy crypto YouTube channel, Ben Armstrong, shared a bullish outlook for Ripple’s XRP token. In a recent X post, he highlighted that the Grayscale XRP Trust fund has seen more than 300% in returns since May 2024, suggesting strong confidence in the cryptocurrency.
He also signaled the robust return as a good sign for the potential launch of Ripple-backed ETFs in the U.S. This also comes as XRP recorded a strong resurgence, amid a positive sentiment in the broader crypto market, following Donald Trump’s victory.
Grayscale recently applied with the SEC for a Solana (SOL) ETF, sparking discussions over a similar product for XRP from the digital asset manager. Recent filings from renowned financial institutions, such as Bitwise, Canary Capital, 21Shares, and WisdomTree, for a spot Ripple ETF have also fueled speculation toward a potential launch in the coming weeks or months, boosting traders’ sentiment for XRP.
XRP Could Target $4.5 As RLUSD Enters Decentralized Markets
Armstrong remains positive about Ripple’s future trajectory. He predicts the price of XRP to rally to $4.5 as early as the month’s end or by January 2025. Meanwhile, the approval and testing of RLUSD have coincided with a notable increase in the token’s market value, rising from $1.90 to $2.35.
While some analysts described this surge as a “speculative pump” for the token, others suggest that it could see further gains once RLUSD enters decentralized finance (DeFi) markets.
Blockchain software engineer ‘Vincent Van Code’ emphasized that the liquidity pool (LP) and automated market maker (AMM) capabilities for RLUSD on the Ripple blockchain could drive demand. He suggested that users earning returns through LPs might contribute to increased XRP adoption and the ability to swap RLUSD with other stablecoins or use it for on-chain staking could further integrate the token into DeFi activities.
Amid the hype surrounding the launch of RLUSD and XRP ETFs, significant whale activity was observed on the XRP Ledger. Recently, an unknown wallet moved over 39.43 million XRP ($95.5 million) to Coinbase, and a separate transaction saw a whale transfer of 99.99 million XRP, worth $234.4 million, between two unknown wallets.
There is no official date for RLUSD’s launch, but Ripple CEO Brad Garlinghouse stated in an X post that when the stablecoin “is live, you’ll hear it from Ripple first”.
At the time of writing, Ripple (XRP) is trading at $2.33 – down 2.38% in the last 24 hours.
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